VES-4-01-CO:RR:IT:EC 114120 GEV
Kurt E. Bosshart, Esq.
Alley, Maass, Rogers & Lindsay, P.A.
1600 S.E. 17th Street Causeway
Suite 404
Ft. Lauderdale, Florida 33316
RE: Foreign-flag Yacht; Cruising License; 46 U.S.C. App. 104
Dear Mr. Bosshart:
This is in response to your letter of September 19, 1997,
requesting a ruling regarding the proposed use of your client's
foreign-flag yacht while it is in the United States. Our ruling
on this matter is set forth below.
FACTS:
The SOUTHERN CROSS III is a Japanese-built, British-flag
yacht shipped to the United States by freighter. The vessel, for
which application for a cruising license will be made, is not
being offered for sale or charter while in the United States and
will otherwise conform with all applicable Customs Regulations.
It is owned by Southern Cross III, Ltd., a Jersey, Channel
Island-registered company, the beneficial owner of which is a
non-U.S. resident and citizen.
The primary purposes of the vessel's shipment to the United
States are to complete needed repair and refit work in a Florida
repair yard and for pleasure cruising. With respect to the
latter, the beneficial owner would like to host a reception on
board the vessel for the following guests:
(1) employees of Bounty International, a luxury home
and yacht sales
company located in Fort Lauderdale, Florida,
showcasing yachts
and homes worldwide;
(2) clients of Bounty International; and
(3) personal friends of the beneficial owner.
- 2 -
In regard to the aforementioned guests, it is stated that
Bounty International is wholly owned by the beneficial owner, but
is not offering the subject vessel for sale. The brokerage
specializes in yachts of much smaller size and caliber than the
yacht under consideration. The clients of Bounty International
are individuals who have purchased through the brokerage and
would be entertained, in an effort to maintain their goodwill and
encourage repeat sales through Bounty International. The
personal friends of the beneficial owner are his private guests
from whom no business expectation is derived.
In addition to the guests of the above-described reception,
the beneficial owner would also like to conduct a wedding
ceremony aboard the vessel for an employee of Bounty
International. We note that the wedding reception will be
conducted elsewhere.
ISSUE:
Whether the uses of the foreign-flag yacht discussed above
contravene the issuance of a cruising license pursuant to 19 CFR
4.94.
LAW AND ANALYSIS:
Section 4.94, Customs Regulations (19 CFR 4.94) addresses
the issuance of cruising licenses which exempt foreign yachts
from formal entry and clearance procedures (e.g., filing
manifests, obtaining permits to proceed and exemptions from the
payment of tonnage tax and entry and clearance fees) at United
States ports. Section 4.94 was promulgated pursuant to title 46,
United States Code Appendix, 104 (46 U.S.C. App. 104) which
authorizes the issuance of cruising licenses to pleasure vessels
of countries which extend reciprocal privileges to United States
vessels. Great Britain is on the list of countries appearing in
4.94(b) whose yachts may be issued cruising licenses.
It should be noted, however, that 46 U.S.C. App. 104
provides that on the basis of reciprocity, foreign yachts may be
granted cruising licenses provided they are "...used and employed
exclusively as pleasure vessels..." (Emphasis added) Upon
reviewing the proposed activities to be conducted on board the
SOUTHERN CROSS III with specific regard to the guests in
question, it is our determination that the entertainment of the
clients of Bounty International is for other than purposes of
pleasure. Accordingly, while the remainder of the aforementioned
guests may be on board the SOUTHERN CROSS III during the proposed
reception and wedding without contravening the issuance of a
cruising license, the same cannot be said for the clients of
Bounty International.
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HOLDING:
With the exception of the on board entertainment of the
clients of Bounty International, the uses of the foreign-flag
yacht discussed above do not contravene the issuance of a
cruising license pursuant to 19 CFR 4.94.
Sincerely,
Jerry Laderberg
Chief
Entry Procedures and Carriers
Branch